AN ACT
RELATING TO HEALTH INSURANCE; REVISING BOARD MEMBERSHIP AND
ELIGIBILITY CRITERIA FOR THE MEDICAL INSURANCE POOL; AMENDING SECTIONS OF THE
NMSA 1978.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 59A-54-3 NMSA 1978 (being Laws 1987,
Chapter 154, Section 3, as amended) is amended to read:
"59A-54-3. DEFINITIONS.--As used in the Medical
Insurance Pool Act:
A. "board" means the board of
directors of the pool;
B. "creditable coverage" means, with
respect to
an individual, coverage of the individual pursuant to:
(1) a group health plan;
(2) health insurance coverage;
(3) Part A or Part B of Title 18 of the Social
Security Act;
(4) Title 19 of the Social Security Act except
coverage consisting solely of benefits pursuant to Section 1928 of that title;
(5) 10 USCA Chapter 55;
(6) a medical care program of the Indian health
service or of an Indian nation, tribe or pueblo;
(7) the Medical Insurance Pool Act;
(8) a health plan offered pursuant to
5 USCA Chapter 89;
(9) a public health plan as defined in federal
regulations; or
(10) a health benefit plan offered pursuant to
Section 5(e) of the federal Peace Corps Act;
C. "federally defined eligible
individual" means an individual:
(1) for whom, as of the date on which the
individual seeks coverage under the Medical Insurance Pool Act, the aggregate
of the periods of creditable coverage is eighteen or more months;
(2) whose most recent prior creditable coverage
was under a group health plan, government plan, church plan or health insurance
coverage offered in connection with such a plan;
(3) who is not eligible for coverage under
a group health plan, Part A or Part B of Title 18 of the
Social Security Act or a state plan under Title 19 or
Title 21 of the Social Security Act or a successor program
and who does not have other health insurance coverage;
(4) with respect to whom the most recent coverage
within the period of aggregate creditable coverage was not terminated based on
a factor relating to nonpayment of premiums or fraud;
(5) who, if offered the option of continuation of
coverage under a continuation provision pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985 or a similar state program elected this
coverage; and
(6) who has exhausted continuation coverage under
this provision or program, if the individual elected the continuation coverage
described in Paragraph (5) of this subsection;
D. "health care facility" means any
entity providing health care services that is licensed by the department of health;
E. "health care services" means any
services or products included in the furnishing to any individual of medical
care or hospitalization, or incidental to the furnishing of such care or
hospitalization, as well as the furnishing to any person of any other services
or products for the purpose of preventing, alleviating, curing or
healing human illness or injury;
F. "health insurance" means any
hospital and medical expense-incurred policy; nonprofit health care service
plan contract; health maintenance organization subscriber contract; short-term,
accident, fixed indemnity, specified disease policy or disability income
contracts; limited benefit insurance; credit insurance; or as defined by
Section 59A-7-3 NMSA 1978. "Health
insurance" does not include insurance arising out of the Workers'
Compensation Act or similar law, automobile medical payment insurance or insurance
under which benefits are payable with or without regard to fault and that is
required by law to be contained in any liability insurance policy;
G. "health maintenance organization"
means any person who provides, at a minimum, either directly or through
contractual or other arrangements with others, basic health care services to
enrollees on a fixed prepayment basis and who is responsible for the
availability, accessibility and quality of the health care services provided or
arranged, or as defined by Subsection M of Section 59A-46-2 NMSA 1978;
H. "health plan" means any arrangement
by which persons, including dependents or spouses, covered or making
application to be covered under the pool have access to hospital and medical
benefits or reimbursement, including group or individual insurance or subscriber
contract; coverage through health maintenance organizations, preferred provider
organizations or other alternate delivery systems; coverage under prepayment,
group practice or individual practice plans; coverage under uninsured
arrangements of group or group-type contracts, including employer self-insured,
cost-plus or other benefits methodologies not involving insurance or not
subject to New Mexico premium taxes; coverage under group-type contracts that
are not available to the general public and can be obtained only because of
connection with a particular organization or group; and coverage by medicare or
other governmental benefits.
"Health plan" includes coverage through health insurance;
I. "insured" means an individual
resident of this state who is eligible to receive benefits from any insurer or
other health plan;
J. "insurer" means an insurance
company
authorized
to transact health insurance business in this state, a nonprofit health care
plan, a health maintenance organization and self-insurers not subject to
federal preemption. "Insurer"
does not include an insurance company that is licensed under the Prepaid Dental
Plan Law or a company that is solely engaged in the sale of dental insurance
and is licensed not under that act, but under another provision of the
Insurance Code;
K. "medicare" means coverage under
Part A or
Part B of Title 18 of the Social Security Act, as amended; L. "pool" means the New Mexico medical
insurance pool;
M. "preexisting condition" means a
physical or mental condition for which medical advice, medication, diagnosis,
care or treatment was recommended for or received by an applicant within six
months before the effective date of coverage, except that pregnancy is not
considered a preexisting condition; and
N. "therapist" means a licensed
physical, occupational, speech or respiratory therapist."
Section 2. Section 59A-54-4 NMSA 1978 (being Laws 1987,
Chapter 154, Section 4, as amended) is amended to read:
"59A-54-4. POOL CREATED--BOARD.--
A. There is created a nonprofit entity to be
known as the "New Mexico medical insurance
pool". All insurers shall organize
and remain members of the pool as a condition of their authority to transact
insurance business in this state. The
board is a governmental entity for purposes of the Tort Claims Act.
B. The superintendent shall, within sixty days
after the effective date of the Medical Insurance Pool Act, give notice to all
insurers of the time and place for the initial organizational meetings of the
pool. Each member of the pool shall be
entitled to one vote in person or by proxy at the organizational meetings.
C. The pool shall operate subject to the
supervision and approval of the board.
The board shall consist of the superintendent or his designee, who shall
serve as the chairman of the board, four members appointed by the members of
the pool and six members appointed by the superintendent. The members appointed by the superintendent
shall consist of four citizens who are not professionally affiliated with an
insurer, at least two of whom shall be individuals who are insured by the pool,
who would qualify for pool coverage if they were not eligible for particular
group coverage or who are a parent, guardian, relative or spouse of such an
individual. The superintendent's fifth
appointment shall be a representative of a statewide health planning agency or
organization. The superintendent's sixth
appointment shall be a representative of the medical community.
D. The members of the board appointed by the
members of the pool shall be appointed for initial terms of four years or less,
staggered so that the term of one member shall expire on June 30 of each year. The members of the board appointed by the
superintendent shall be appointed for initial terms of five years or less,
staggered so that the term of one member expires on June 30 of each year. Following the initial terms, members of the
board shall be appointed for terms of three years. If the members of the pool fail to make the
initial appointments required by this subsection within sixty days following
the first organizational meeting, the superintendent shall make those
appointments. Whenever a vacancy on the
board occurs, the superintendent shall fill the vacancy by appointing a person
to serve the balance of the unexpired term.
The person appointed shall meet the requirements for initial appointment
to that position. Members of the board
may be reimbursed from the pool subject to the limitations provided by the Per
Diem and Mileage Act and shall receive no other compensation, perquisite or
allowance.
E. The board shall submit a plan of operation to
the superintendent and any amendments to it necessary or suitable to assure the
fair, reasonable and equitable administration of the pool.
F. The superintendent shall, after notice and
hearing, approve the plan of operation, provided it is determined to assure the
fair, reasonable and equitable administration of the pool and provides for the
sharing of pool losses on an equitable, proportionate basis among the members
of the pool. The plan of operation shall
become effective upon approval in writing by the superintendent consistent with
the date on which coverage under the Medical Insurance Pool Act is made
available. If the board fails to submit
a plan of operation within one hundred eighty days after the appointment of the
board, or any time thereafter fails to submit necessary amendments to the plan
of operation, the superintendent shall, after notice and hearing, adopt and
promulgate such rules as are necessary or advisable to effectuate the
provisions of the Medical Insurance Pool Act.
Rules promulgated by the superintendent shall continue in force until
modified by him or superseded by a subsequent plan of operation submitted by
the board and approved by the superintendent.
G. Any reference in law, rule, division
bulletin, contract or other legal document to the New Mexico comprehensive
health insurance pool shall be deemed to refer to the New Mexico medical
insurance pool."
Section 3. Section 59A-54-10 NMSA 1978 (being Laws 1987,
Chapter 154, Section 10, as amended) is amended to read:
"59A-54-10. ASSESSMENTS.--
A. Following the close of each fiscal year, the
pool administrator shall determine the net premium, being premiums less
administrative expense allowances, the pool expenses and claim expense losses
for the year, taking into account investment income and other appropriate gains
and losses. The assessment for each
insurer shall be determined by multiplying the total cost of pool operation by
a fraction the numerator of which equals that insurer's premium and subscriber
contract charges or their equivalent for health insurance written in the state
during the preceding calendar year and the denominator of which equals the
total of all premiums and subscriber contract charges written in the state;
provided that premium income shall include receipts of medicaid managed care
premiums but shall not include any payments by the secretary of health and
human services pursuant to a contract issued under Section l876 of the Social
Security Act, as amended. The board may
adopt other or additional methods of adjusting the formula to achieve equity of
assessments among pool members, including assessment of health insurers and
reinsurers based upon the number of persons they cover through primary, excess
and stop-loss insurance in the state.
B. If assessments exceed actual losses and
administrative expenses of the pool, the excess shall be held at interest and
used by the board to offset future losses or to reduce pool premiums. As used in this subsection, "future
losses" includes reserves for incurred but not reported claims.
C. The proportion of participation of each
member in the pool shall be determined annually by the board based on annual
statements and other reports deemed necessary by the board and filed with it by
the member. Any deficit incurred by the
pool shall be recouped by assessments apportioned among the members of the pool
pursuant to the assessment formula provided by Subsection A of this section;
provided that the assessment for any pool member shall be allowed as a
thirty-percent credit on the premium tax return for that member.
D. The board may abate or defer, in whole or in
part, the assessment of a member of the pool if, in the opinion of the board,
payment of the assessment would endanger the ability of the member to fulfill
its contractual obligation. In the event
an assessment against a member of the pool is abated or deferred in whole or in
part, the amount by which such assessment is abated or deferred may be assessed
against the other members in a manner consistent with the basis for assessments
set forth in Subsection A of this section.
The member receiving the abatement or deferment shall remain liable to
the pool for the deficiency for four years."
Section 4. Section 59A-54-12 NMSA 1978 (being Laws 1987,
Chapter 154, Section 12, as amended) is amended to read:
"59A-54-12. ELIGIBILITY--POLICY PROVISIONS.--
A. Except as provided in Subsection B of this
section, a person is eligible for a pool policy only if on the effective date
of coverage or renewal of coverage the person is a New Mexico resident, and:
(1) is not eligible as an insured or covered
dependent for any health plan that provides coverage for comprehensive major
medical or comprehensive physician and hospital services;
(2) is currently paying a rate for a health plan
that is higher than one hundred twenty-five percent of the pool's standard
rate;
(3) has been rejected for coverage for
comprehensive major medical or comprehensive physician and hospital services;
(4) is only eligible for a health plan with a
rider, waiver or restrictive provision for that particular individual based on
a specific condition;
(5) has a medical condition that is listed on the
pool's pre-qualifying conditions;
(6) has as of the date the individual seeks
coverage from the pool an aggregate of eighteen or more months of creditable
coverage, the most recent of which was under a group health plan, governmental
plan or church plan as defined in Subsections P, N and D, respectively, of
Section 59A-23E-2 NMSA 1978, except, for the purposes of aggregating creditable
coverage, a period of creditable coverage shall not be counted with respect to
enrollment of an individual for coverage under the pool if, after that period
and before the enrollment date, there was a sixty-three-day or longer period
during all of which the individual was not covered under any creditable coverage;
or
(7) is entitled to continuation coverage pursuant
to Section 59A-23E-19 NMSA 1978.
B. Notwithstanding the provisions of Subsection
A of this section:
(1) a person's eligibility for a policy issued
under the Health Insurance Alliance Act shall not preclude a person from
remaining on or purchasing a pool policy; provided that a self-employed person
who qualifies for an approved health plan under the Health Insurance Alliance
Act by using a dependent as the second employee may choose a pool policy in
lieu of the health plan under that act;
(2) a pool policyholder shall be eligible for
renewal of pool coverage even though the policyholder became eligible for
medicare or medicaid coverage while covered under a pool policy; and
(3) if a pool policyholder becomes eligible for
any group health plan, the policyholder's pool coverage shall not be
involuntarily terminated until any preexisting condition period imposed on the
policyholder by the plan has been exhausted.
C. Coverage under a pool policy is in excess of
and shall not duplicate coverage under any other form of health insurance.
D. A policyholder's newborn child or newly
adopted child is automatically eligible for thirty-one consecutive calendar
days of coverage for an additional premium.
E. Except for a person eligible as provided in
Paragraph (6) of Subsection A of this section, a pool policy may contain
provisions under which coverage is excluded during a six-month period following
the effective date of coverage as to a given individual for preexisting
conditions.
F. The preexisting condition exclusions
described in Subsection E of this section shall be waived to the extent to
which similar exclusions have been satisfied under any prior health insurance
coverage that was involuntarily terminated, if the application for pool
coverage is made not later than thirty-one days following the involuntary
termination. In that case, coverage in
the pool shall be effective from the date on which the prior coverage was
terminated. This subsection does not
prohibit preexisting conditions coverage in a pool policy that is more
favorable to the insured than that specified in this subsection.
G. An individual is not eligible for coverage by
the pool if:
(1) except as provided in Subsection I of
this section, the individual is, at the time of application,
eligible for medicare or medicaid that would provide coverage for amounts in
excess of limited policies such as dread disease, cancer policies or hospital
indemnity policies;
(2) the individual has voluntarily terminated
coverage by the pool within the past twelve months and did not have other
continuous coverage during that time, except that this paragraph shall not
apply to an applicant who is a federally defined eligible individual;
(3) the individual is an inmate of a public
institution or is eligible for public programs for which medical care is
provided;
(4) the individual is eligible for coverage under
a group health plan;
(5) the individual has health insurance coverage
as defined in Subsection R of Section 59A-23E-2 NMSA 1978;
(6) the most recent coverages within the coverage
period described in Paragraph (6) of Subsection A of this section were
terminated as a result of nonpayment of premium or fraud; or
(7) the individual has been offered the
option of continuation coverage under a federal COBRA
continuation provision as defined in Subsection F of Section 59A-23E-2 NMSA
1978 or under a similar state program and he
has elected the coverage and did not exhaust the
continuation coverage under the provision or program.
H. Any person whose health insurance coverage
from a qualified state health policy with similar coverage is terminated
because of nonresidency in another state may apply for coverage under the pool. If the coverage is applied for within
thirty-one days after that termination and if premiums are paid for the entire
coverage period, the effective date of the coverage shall be the date of
termination of the previous coverage.
I. The board may issue a pool policy for
individuals who:
(1) are enrolled in both Part A and Part B of
medicare because of a disability; and
(2) except for the eligibility for medicare,
would otherwise be eligible for coverage pursuant to the criteria of this
section."